Sequential’s active brands have found a new owner.
Galaxy Universal, LLC announced Friday that it will acquire Sequential’s active brand portfolio, which includes the And1, Avia, Gaiam and SPRI brands. The deal, which is valued at close to $330 million, is expected to close by mid-November and is subject to court approval.
Galaxy was initially poised as the stalking horse bidder for the brands after it bid $333 million in August.
The New York-based Galaxy markets, designs, sells, sources and manufactures athletic and work footwear in over 40,000 stores. The company also owns Hi-Tec, Interceptor, Magnum, Tony Hawk and is a licensee of the Justice, London Fog, And1 and Avia brands. Galaxy is a portfolio company of Gainline Capital Partners, a private equity firm. Global investment firm KRR, which led debt financing for the deal, will serve as a co-investor.
“In this ever-changing marketplace, we are strategically positioned to deliver on the customers’ constantly evolving expectations,” said Galaxy CEO Eddie Esses. “Galaxy is able to provide great brands, unique designs and upgraded quality at exceptional values.”
Sequential Brands Group, Inc., which also owns the the Jessica Simpson and Joe’s Jeans brands, filed for Chapter 11 bankruptcy protection in August. The company said that “significant debt on its corporate balance sheet” made it no longer able to operate its portfolio.
“The rich heritage of these brands combined with the passion, experience and unrivaled track record of Mr. Esses and his team distinguishes this investment,” said Allan Weinstein, managing partner of Gainline. “We are thrilled to support this team and advance the Galaxy partnership as the company expands and future acquisition opportunities present themselves.”
According to financial documents, Sequential had an outstanding net debt of $452.3 million as of December 31, 2020. To pay back lenders, the company sold some of its brands this year. Sequential sold the Ellen Tracy and Caribbean Joe Island Supply Co. brands to the GMA Group for a total of $20 million in August. It also sold its Heeling Sports brand BBC International for $11 million in April.
Jessica Simpson told FN last month she and her mother were closing in a deal to buy back the remaining 62.5% of her brand. In 2015, Sequential acquired a majority stake in the label, with the Camuto Group continuing to produce the collection’s footwear. Jessica and Tina currently own 37.5% of the brand.